Young Boca Ponzi schemer sentenced to 10 years in prison

(Photo courtesy of Las Vegas…)

June 27, 2013|By Jon Burstein, Sun Sentinel

West Palm Beach — — With a federal judge branding him "a junior Bernie Madoff," a former model was sentenced Thursday to a little more than 10 years in prison for the $10-million Ponzi scheme he concocted when he was 21 years old.

Donald R. French Jr. used investors' money to reinvent himself from suburban Detroit kid to wealthy jet-setter pursuing a glossy magazine lifestyle, complete with a home in Rome and an Italian actress as his girlfriend. French appeared in an Italian movie with a casting agency there likening him to Brad Pitt because of his All-American good looks.

The ride ended last summer when South African authorities detained him and shipped him to Las Vegas to face bad check charges. Once in the United States, French admitted to the FBI he had been running an investment fraud through his Boca Raton-based company, D3 Capital Management.

French had persuaded people he could get them high returns by investing in foreign currencies, emeralds and a solar-energy project in Italy. Many of his more than 50 investors were family members and their friends.

Before his sentencing, French, now 26, acknowledged that family members had lost their entire life's savings because of him.

"I followed the advice of a lot of people, trying to be something I wasn't, trying to be bigger than I was," French said.

He said he has had problems with lying since a young age and wants to change so he can be reunited with his 4-year-old daughter and other family members. A half-dozen relatives, including his father, attended Thursday's court hearing.

U.S. District Judge Kenneth Ryskamp questioned whether French was truly remorseful, saying his crimes were "even worse" because he victimized people close to him. Ryskamp later called him "just a junior Bernie Madoff."

French's attorney, Assistant Federal Public Defender Peter Birch, told Ryskamp he didn't think it was fair to compare his client to Madoff, the Wall Street financier serving 150 years in prison for a $64 billion Ponzi scheme.

Ryskamp responded: "The plan is the same, the amount of money is different."

Before the hearing, Birch and prosecutors agreed to ask the judge to give French a prison term based on the recommended federal sentencing guidelines, leaving French facing between eight and 10 years behind bars.

Birch asked for the lowest possible sentence, arguing his client immediately took responsibility for his actions when he came back to the United States.

"He was a kid with a lot of money that he handled inappropriately," Birch said.

Ryskamp rejected Birch's arguments, sentencing the former Florida Atlantic University student to the maximum 121 months, or just over 10 years. The judge said he finds Ponzi schemes to be "outrageous."

French pleaded guilty in March to a single count of conspiracy to commit mail and wire fraud.

Assistant U.S. Attorney Ellen Cohen said French invested no more than 15 percent of the funds he received, but later withdrew the money he put in those investments. He also paid $1 million for emeralds that turned out to be worthless, Cohen said.

"It is astonishing what someone at such a young age was able to do in such a short time," Cohen said.

Local experts on white-collar crime have said they can't recall anyone as young as French pulling off a multi-million-dollar investment fraud.

After launching the Ponzi scheme in 2008, French visited 30 countries and went on wild Las Vegas gambling sprees, racking up casino debts approaching $690,000. French made $1.3 million in cash withdrawals and put an additional $1.5 million on debit cards, court records show.

When the FBI questioned him, French said he had used his "gift of gab" to manipulate people. He persuaded one investor to put in nearly $2 million, court records show.

"You have to wonder if he hadn't been caught, what would have happened," Cohen said.